How to Manage a Joint Checking Account

A joint checking account can seriously simplify your life — or it can become a source of constant stress. The outcome depends on whether a joint account fits your relationship and your style of communication around money.

Torn on what’s right for you? Don’t be! We’ll walk you through the decision process.

What Is a Joint Checking Account?

A joint checking account is a checking account that belongs to two or more people. It’s a common choice for married couples, but joint checking can also be useful for:

• Parents co-managing accounts with children

• Adults assisting their aging parents or other dependents

• Unmarried adults who share living expenses, such as roommates or couples  

• Business partners

With a joint account, everyone whose name is on the account can use the account to deposit, transfer, or withdraw money. Each person on the account can also have their own debit card and checks connected to that account, as well as their own personal login credentials for mobile banking.

Should You Get a Joint Account?

Does being married mean you need a joint checking account? Not necessarily. Some couples still prefer the independence of keeping their finances separate. It all depends on your goals, values, and circumstances.

Pros and Cons of Joint Checking Account

Here’s a quick look at the pros and cons of sharing an account with someone else. 

What Are the Benefits of Joint Checking Accounts?

If you are considering a joint checking account, there are several benefits to consider:

1. Convenience

Joint accounts can be convenient. They make it easy for everyone on the account to access and monitor shared money. A joint checking account makes it easier for couples to combine their assets, budget together, and track shared financial goals.

Did you know? Business co-owners can also benefit from joint checking. Each owner can track income and expenditures from the same account, simplifying bookkeeping and bill pay.

2. Oversight

If you’re responsible for helping other people manage their money, you might rely on joint checking to stay connected. This goes for parents with minors or college-age children, as well as adults who help aging parents or other dependents. 

Joint accounts enable you to easily monitor spending habits, move money around freely, and ensure bills are paid on time when your dependents need help.

3. More FDIC or NCUA Coverage  

The FDIC insures money held in banks in the event they fail. The NCUA does the same thing for credit unions. Both organizations insure up to $250,000 per depositor, per account. That means if you share an account with someone, your money could be insured up to $500,000 instead.

4. Higher Dividends

If you have a dividend-bearing checking account, combining your money into one account could help you earn more. Think about it: two contributors may mean more money in your account at any given time. 

You might even qualify for a higher dividend rate with your higher, combined balance.

Cons of Joint Checking Accounts

Here are some cons to keep in mind when considering joint checking:

1. Overdraft Risk

It can be easy to overdraw a joint checking account with two people spending from the account independently. Sharing an account means you’ll want to set ground rules for spending, stick to them, and communicate openly.

2. Some Loss of Privacy

When you share a checking account with someone, they can see everything you spend money on from that account. This can be problematic for couples who value money differently or college-age adults who want greater independence from parents. 

3. Relationship Complications

Money is a common source of stress for couples. If a relationship ends, it can be tough to divide a shared checking account because banks consider everything in a joint account to be shared equally regardless of who deposited it. Depending on your bank or credit union, both account holders may have to consent to close a joint checking account.

Our advice? Consider everything you put in your joint checking account to be fair game for a 50/50 split from the get-go — or simply get in writing how things would be split up should the time come. 

4. Subject to Creditors 

If you share a joint checking account with someone who has run up debts in the past, your shared account could be subject to creditors or debt collection. It doesn’t matter if the debt isn’t yours. This is why it’s important to only open joint checking accounts with someone you know well and trust.

The Hybrid Approach

An exclusive joint account isn’t the best approach for everyone, especially for couples who can't quite agree on what to do with their money. Another option would be to take a hybrid approach: separate accounts for your own spending money, with a joint account to handle mutual expenses like utilities and rent or mortgage payments. 

The best of both worlds, this approach ensures essential expenses are covered while giving each person the freedom to spend the rest of their money however they choose.

How to Open a Joint Checking Account

Opening a joint checking account is similar to opening one for just yourself. To open a joint checking account, you’ll need personal information for each person on the account, including:

• Full legal name

• Date of birth

• Social Security number 

• Valid government-issued ID like a driver’s license or passport

• Contact information

• Minimum opening deposit

You can open a joint checking account online or in person. If you’re opening it online, be sure to select the “joint account option” on your bank or credit union’s website. You can also turn a checking account into a joint account by calling your financial institution and adding a person as an account holder. 

Tips for Making Your Joint Account Work

Joint checking accounts require communication. Whether you’re opening an account with your spouse or someone else, here are some important things to discuss before your finances turn into fights.

Agree on Financial Ground Rules

It’s important that you and other account holders are on the same page about what to do with your money. 

Depending on your circumstances, you may want to set certain spending limits, record expenditures in a shared place, or set specific savings goals. If the rules you initially come up with don't work, that's okay — just have another conversation and figure out how to make it work.

Work Out a Budget

Whether you use paper, a spreadsheet, or an app, write down all your bills and what you both typically spend every month. If the budget doesn't work, talk about it and decide how to proceed together. 

Consider this: While budgeting sounds boring, this is actually a good time to talk about your long-term goals together and make a plan to save up for them.

Decide Who Pays the Bills

There's no right or wrong answer here. One spouse may handle all the bills, or you may draw up specific responsibilities for who does what (e.g., one of you manages the cell phone bills, the other handles the rent). It's important to make sure you both know who's responsible for what so no financial obligations fall through the cracks.

Set Aside Time to Discuss Finances

Budgets aren’t etched in stone for a reason — your financial situation will likely change as your life changes. It’s important to periodically revisit your joint finances and tweak things that need updating. Whether it’s once a year or once a week is up to you — either way, prioritize time to talk about your shared finances. 

The Takeaway

Sharing finances with another person can be challenging, but under the right circumstances, a joint account can make it easier. As long as you communicate openly and honestly, you’re sure to work through any obstacles.